Government: "Low-credit Corporate Bond Purchases to End by Year-End"... Bank of Korea SPV Maturity Extension

[Asia Economy Reporter Jang Sehee] The Special Purpose Vehicle (SPV) established to respond to COVID-19 will end the purchase of corporate bonds and commercial papers (CP), including low credit ratings, as scheduled on the 31st of this month.

The government, the Bank of Korea, and the Korea Development Bank announced on the 23rd, "Considering that the corporate bond and CP markets are showing relatively stable trends compared to when the SPV was established, and the need to normalize COVID-19 crisis response measures, we have decided accordingly." The SPV officially launched in July last year and extended the purchase deadline twice in January and July this year.

Additionally, on the same day, the Bank of Korea's Monetary Policy Committee approved the extension of the maturity of the second loan executed for the SPV in January this year.

Meanwhile, the government decided to assign the SPV an emergency organization role to quickly secure additional funds and resume corporate bond and CP purchases if the situation worsens, considering potential market volatility.

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